On Thursday, TD Cowen expressed a positive outlook on United Continental (NASDAQ:UAL) shares by increasing the stock's price target to $100 from the previous $80 while maintaining a Buy rating. The adjustment reflects the firm's reassessment of United's future financial performance.
The analyst at TD Cowen revised their financial model for United Continental to include the latest guidance provided by the airline's management for the fourth quarter of 2024 and beyond. This update follows a reassessment of the company's growth prospects and operational improvements.
United Continental's stock has been undergoing a re-rating since early August, a trend that the analyst believes is in its early stages. According to the analyst's view, the market is starting to recognize the positive changes at United. This sentiment is driven by several factors contributing to the airline's performance.
The analyst highlighted multiple factors that could propel United Continental's growth, including the ongoing recovery in corporate travel, the development of its international franchise, gains in domestic market share, the success of its MileagePlus program, and the potential for increased returns to shareholders.
The firm's revised price target of $100 indicates a confidence in United Continental's strategy and the airline's ability to capitalize on the current tailwinds in the industry. The analyst's comments suggest that these developments are likely to be well-received by investors as they evaluate United's potential for future growth.
In other recent news, United Airlines has surpassed earnings expectations with a third-quarter performance reporting adjusted earnings per share (EPS) of $3.33. The airline also announced a new $1.5 billion share repurchase program, the first since the onset of the COVID-19 pandemic.
This move signals confidence in the company's financial health. In addition, United Airlines has projected a stronger profit for the current quarter, with an adjusted profit expectation ranging from $2.50 to $3 per share, surpassing the average analyst forecast.
Analysts from Deutsche Bank, Barclays, and Evercore ISI have respectively raised their price targets for United Airlines, maintaining positive ratings. The new price targets reflect the company's strong financial results and the ability to manage operational challenges. The airline's performance has been aided by lower fuel costs and robust domestic growth, which are expected to contribute to a strong fourth-quarter report.
United Airlines has also announced a significant expansion of its international flight schedule for summer 2025, including eight new destinations. However, due to escalating tensions in the Middle East, the airline has had to adjust its flight schedules, affecting services to and within the region. These are recent developments providing investors with insights into the current state of United Airlines.
InvestingPro Insights
Recent data from InvestingPro aligns with TD Cowen's bullish outlook on United Continental (NASDAQ:UAL). The company's stock has shown remarkable performance, with a 79.5% price return over the past year and a 74.54% return year-to-date. This strong momentum is further evidenced by the stock trading at 97.79% of its 52-week high, supporting the analyst's view of an ongoing re-rating.
InvestingPro Tips highlight that UAL is trading at a low P/E ratio of 7.72 relative to its near-term earnings growth, which could indicate potential undervaluation. This metric aligns with the analyst's expectation of further upside potential. Moreover, the company's profitability over the last twelve months and analysts' predictions of profitability for the current year reinforce the positive outlook on UAL's financial performance.
It is worth noting that InvestingPro offers 13 additional tips for UAL, providing investors with a comprehensive analysis of the company's prospects. These insights can be valuable for those looking to delve deeper into United Continental's investment potential.
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